BXP Stock Rallies 11.3% in a Month: Will It Continue to Rise?

BXP Inc. BXP shares have rallied 11.3% over the past month, outperforming the industry's growth of 0.7%.

BXP boasts a portfolio of Class A office assets in a few select markets of the United States. The healthy tenant demand for premier office assets and the company's ability to offer such spaces are driving leasing activity and rental growth.

On April 29, 2025, BXP announced that it has signed more than 1.1 million square feet of leases in the first quarter of 2025, 25% higher year over year. Around 270,000 square feet of leases were signed subsequent to the quarter’s end through April 29, bringing the total to nearly 1.4 million square feet, which is highly encouraging.

Factors Behind BXP Stock Price Surge: Will the Trend Last?

BXP is well-poised to gain from the rise in demand for top-quality office spaces driven by technology and life science businesses. To cater to the strong demand from life-science tenants, BXP is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio, positioning the company well for long-term growth. As of March 31, 2025, BXP had two life-science projects under development, encompassing 0.9 million RSF with an estimated total investment of $675.1 million (BXP’s share) and 71% pre-leased.

The return-to-office policies implemented by many companies, coupled with a relatively low unemployment rate and consistent job growth, are likely to drive the demand for BXP's strategically located, high-quality office properties. In addition, this office REIT’s tenant roster includes several industry bellwethers, such as Salesforce, Biogen, Google, Bank of America, Microsoft and Wellington Management. Its long-term leases with tenants having a solid credit profile assure stable cash flows.

BXP has been focusing on successfully executing its capital reallocation strategy. From the beginning of 2010 through the end of the first quarter of 2025, BXP carried out acquisitions worth $7.6 billion at its share. It also disposed of properties for an aggregate amount of $8.2 billion at its share during this period. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.

Moreover, the company has an encouraging development and redevelopment pipeline, which bodes well for its long-term growth. As of the end of the first quarter of 2025, BXP had nine office, lab/life science, retail and residential projects underway, with its share of the estimated total investment aggregating around $2.26 billion. The company projects the properties under development and redevelopment to add around $158 million to the company’s share of net operating income-cash upon stabilization.

BXP has a healthy balance sheet position with ample liquidity. The company exited the first quarter of 2025 with cash and cash equivalents of $398.1 million. BXP’s share of net debt to EBITDAre (annualized) was 8.33X, and the fixed charge coverage ratio was 2.38 times as of the same date. Given its solid financial position and prudent capital management, BXP seems well-poised to navigate any economic uncertainty and industry choppiness and capitalize on future growth opportunities.

Key Risks for BXP

However, amid an uncertain macroeconomic situation with policy changes, companies are delaying their decision-making for leasing assets. High competition and a huge development outlay add to BXP’s woes.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are VICI Properties VICI and W.P. Carey WPC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.

The consensus estimate for W.P. Carey’s current-year FFO per share has moved marginally northward in the past month to $4.88.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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